A Very Good Idea

The FDIC is looking to use a formula for its insurance fees that is driven by banker pay:

U.S. regulators are set to consider a plan that would tie the amount banks pay for deposit insurance to the riskiness of the institutions' pay structures, a source familiar with the matter said Thursday.

Under the proposal to be considered next week by the board of the Federal Deposit Insurance Corp, banks that base compensation on solid performance metrics and include measures such as "clawbacks" would pay less for deposit insurance, the source said, speaking anonymously because the proposal has not yet been released.

Banks with riskier schemes that reward short-term gains would have to pay higher fees.

This is a good start, but it's too easy for the bankers to game, and gaming financial contracts is what bankers do.

Set the fee based on total remuneration of the highest paid person at the bank, including bonuses.

For each multiple of the President of the United State's salary ($400K) raise the insurance fee by 1 basis point (0.01%).

If your highest paid guy gets $4 million in a year, the surcharge is a manageable 0.1%, if he gets $40 million a year, it's 1%, if it's $70,324,352, which is what Lloyd Blankfein received in 2007, then it is 1¾%.

That should cut down on banker bonuses.

Hell, make it a payroll tax, and apply it to businesses across the board. It would cut down on overpaid athletes too.